Jet Airways (India) rose 8.35% to Rs 275.75 at 9:24 IST on BSE after the company said Naresh Goyal stepped down as chairman.
The announcement was made after market hours yesterday, 25 March 2019.Meanwhile, the S&P BSE Sensex was up 21.30 points, or 0.06% to 37,830.21.
On the BSE, 11 lakh shares were traded in the counter so far compared with average daily volumes of 12.39 lakh shares in the past two weeks. The stock had hit a high of Rs 276.90 and a low of Rs 262.30 so far during the day. The stock hit a 52-week high of Rs 650.50 on 30 April 2018. The stock hit a 52-week low of Rs 163 on 1 October 2018.
Finding a sustainable solution to the turnaround of Jet Airways has been receiving the attention of all stakeholders to enable the airline to restore normalcy to its level of operations. As part of the proposed solution, the company's board approved the conversion of Re 1 of lenders' debt into equity by the issuance of 11.40 crore equity shares, in accordance with the RBI Circular of 12 February 2018. With this, the consortium of Indian lenders, led by State Bank of India (SBI), will become the majority shareholders of Jet Airways.
The board also approved its reconstitution by resignation of promoter, Mr Naresh Goyal, Mrs. Anita Goyal, and Mr. Kevin Knight, nominee director of Etihad Airways from their positions on the company's board. The two nominees of the promoter and one nominee of Etihad Airways will continue on the board. Two lender nominees will be inducted to its board, subject to the receipt of requisite approvals.
As part of the resolution plan, the lenders will provide an immediate interim funding support of Rs 1500 crore to Jet Airways. The company will also engage with payment intermediaries for release of trapped cash. The airline will leverage the funding to partly clear pending dues towards lessors, vendors, creditors and employees in a phased manner. The move will see Jet Airways re-deploy several of its grounded aircraft back into its network, helping renew many of the routes it had temporarily suspended, which will help restore normalcy of operations, aiding the airline's long term transformation to continue expansion and to regain its position as a global player.
An interim management committee (IMC) has been constituted to oversee the overall financial and operational performance of the airline under the overall supervision of the Board of Directors with the support of McKinsey & Co. The airline's robust and long-term operating plan focuses on revenue enhancement and cost optimisation as the fundamental pillars of building a healthy, growing and durable airline. The plan addresses a cross-section of areas in addition to an operating plan, which takes advantage of the airline's fleet, its resources, slots and its network.
As part of the resolution plan, the lenders will also begin the process of sale/ issue of shares to new investors which is expected to be completed in the June quarter.
Jet Airways (India) reported net loss of Rs 587.77 crore in Q3 December 2018 as against net profit of Rs 165.25 crore in Q3 December 2017. Net sales rose 1.02% to Rs 6147.98 crore in Q3 December 2018 over Q3 December 2017.
Jet Airways is India's premier international airline, currently operates flights to 56 destinations, including India and overseas.
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